Pay Equity: How to Establish Pay Equity Through Point-Factor Analysis

The Great Reshuffle has left us with many new challenges. Due to normalized job-hopping, companies are scrambling to find ways to fill positions with short-term solutions like providing attractive salaries to new hires and astronomical sign-on bonuses. But how does this impact the rest of your compensation program? What about your other most loyal employees?

Structure and consistency are the foundations of a great compensation program. Increasing your salaries to match what candidates are likely to find in the market is good, but simply increasing pay leaves room for issues of equity and transparency. The challenge will be achieving sustainability of your practices and ensuring that when filling new positions, you are able to have justification for salary ranges that reflect both external equity and internal equity. 

Having translatable levels that employees can escalate provides the uniformity that you can use to incentivize good performance. This leveling is the hallmark of a good pay program. This is why we recommend including a point-factor analysis to your compensation analysis.